LatinFinance - March/April 2015 - Supplement - 13

ECUADOR
Economics, says oil should still be the
principal source of FDI this year. With
prices per barrel at half of 2014's level,
"an increase in FDI looks unlikely," he
says. Yet the government is making a
push in other areas.
State ofﬁcials are extremely
encouraged by mining, including the
development of the country's ﬁrst
large-scale mine, Mirador, by Chineseowned Ecuacorriente. Mirador holds
approximately 3 million tons of copper
reserves. Ecuacorriente indicates it will
invest slightly more than $2 billion in the
project over a 15-year period.
Then there's gold. Canada's Kinross
Gold sold its Fruta del Norte (FDN)
project to Fortress Minerals, also of
Canada, for approximately $240 million
in December. FDN is considered one of
the largest undeveloped gold deposits

"WE WANT TO CREATE
CONDITIONS FOR
MINING TO GET
UNDERWAY AS SOON
AS POSSIBLE"
Pedro Merizalde
in the Americas, and Mosquera says the
transaction is a good signal. "Mining in
Ecuador is going to be a positive story,
but it is a story that we are just starting
to tell," he says.
The government appears interested
in speeding up the tale, undertaking
two reforms of mining legislation in as
many years to bring taxes and royalties

country's industrial development.
LF: You mentioned at the start that basic industries
needed to change. But they are still important, what is
being done for them?
RG: Basic industries are important for us, but we have to
make a qualitative leap and are asking the private sector
what is needed to take off.
Of the companies in Ecuador, 90% are small businesses
and microenterprises, and 10% are medium and large
companies. But this 10% produces 90% of goods. We have
identified bottlenecks for small companies. In the agroexport sector, we need to improve productivity and become
more competitive. We are very clear about this.
LF: What are some of the bottlenecks that have been
identified?
RG: The first is bureaucracy. For example, to export
companies need to comply with sanitary standards in the
importing country. This is normal. Here, exports also need
local approval first. We just ended this, because it was
double work for companies.
Second is productivity. We have to increase our levels of

in line with neighboring countries.
President Correa announced in January
that he would remove mining from the
Non-Renewable Resources Ministry and
create a separate ministry.
Non-Renewable Resources Minister
Pedro Merizalde says the decision to
create the new ministry was made
because the country has not yet
obtained the results it wants from
mining. "We want to create conditions
for mining to get underway as soon as
possible. We are going to sweep the
entire eastern highlands to determine
what minerals exist and the possibilities
for developing them. I am very optimistic
that we will ﬁnd reserves," says
Merizalde.
"If Peru has minerals, if Colombia
has minerals, there is no way that the
geology skipped over Ecuador." LF

productivity. And third is access to credit. Businesses need
more access to loans. In Ecuador it is easy to get a consumer
loan to buy a car, TV, etc., which is great. But when
entrepreneurs want a loan it is a different story and they
need to meet many more requirements.
We are making Banco de Fomento more dynamic, more
modern. We have created a fund to guarantee loans to
companies. It does not make sense that a small producer
needs to guarantee a loan with 100% or even 130%. If he
had 130%, he would not need a loan.
LF: Is oil going to remain the chief source of revenue?
RG: We do not want this to be the case. The president is
very keen on developing mining, which we have not taken
advantage of despite knowing there are world-class deposits.
LF: But mining is like oil. It is depends on international
price cycles...
RG: This is where our competitive advantage comes in. We
do not want to see copper mines exporting minerals, but
refineries that can process copper and give it an added value.
This is feasible because of inexpensive energy, which is critical
in refining. LF

March/April 2015 - A Supplement to LatinFinance 13

LatinFinance - March/April 2015 - Supplement

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